On Wednesday, Reddit co-founder Alexis Ohanian praised Elon Musk’s ambitious plans to transform X, formerly Twitter, into the ultimate “everything app.” Now, Omeed Malik, a veteran Wall Street executive and CEO of Farvahar Partners, has piled on the compliments for the billionaire entrepreneur’s efforts.
The Background
What Happened: During an appearance on CNBC’s Last Call, Malik addressed whether the accolades from Ohanian were warranted, given reports that the social media platform’s value has plummeted to less than half of its purchase price. Malik remarked, “He has resurrected X, or Twitter,” suggesting that evaluating X’s worth based solely on Fidelity’s metrics might not be the most accurate approach.
Malik referred to Fidelity’s decision to raise X’s value in its fund by 11% in December, despite holding the stake at a 68% discount compared to Musk’s original purchase price, implying a valuation of approximately $14.1 billion.
Positive Transformation and Momentum
He highlighted how various companies are utilizing X, citing investments in Tucker Carlson and the remarkable traction his videos have garnered on the platform. “When I look at the success Tucker’s had on X, it’s actually mind-blowing and it cannot be discounted,” Malik emphasized. “Now as we start rolling out advertisements on that platform we double the amount of what people pay $7 million for a minute on the Super Bowl,” Malik stated.
He juxtaposed X’s recent success with its financial struggles under previous management, noting losses of $1 billion and $200 million in the final two years before Musk’s takeover.
Strategic Shift and Challenges
Earlier, Ohanian had praised Musk’s efforts to integrate sports betting with BetMGM on X. He said, “Elon Musk told everyone he was going to build “the everything app” and month by month they’ve progressively been shipping the products + partnerships to bring this to fruition.”
Why It’s Important: Under Musk’s leadership, X has undergone a dramatic transformation.
Acquired for $44 billion in October 2022, X, formerly Twitter, has seen significant changes in content guidelines and staffing, resulting in a notable decline in advertising revenue. Musk aims to pivot X toward paid subscriptions from advertising, but it encountered challenges during implementation.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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